The formerly producing Whim Creek copper project could be the centrepiece of a Pilbara base metals hub.
Whim Creek is 80% owned by Anax Metals (with Bill Beament’s Develop holding the minority stake) and last week, Anax signed a memorandum of understanding with GreenTech Metals to potentially establish a base metals production hub.
Whim Creek is 115km from Port Hedland, while GreenTech’s Whundo deposit is 100km to the southwest.
While it’s relatively early days at Whundo in an exploration sense, the deposit has a resource of 6.2 million tonnes at 1.12% copper and 1.04% zinc.
The idea is to truck Whundo ore to Whim Creek for processing, resulting in earlier cashflow for GreenTech and improved economics for Anax.
Whundo remains open and GreenTech has a further three high-priority copper prospects.
Whim Creek
Previous studies on a restart of Whim Creek have indicated pre-production capital costs of A$71 million.
On a 100% basis and as a standalone project, Whim Creek has a projected eight-year mine life producing 55,000 tonnes per annum of concentrate at all-in sustaining costs of A$3.28 per pound.
Based on a copper price of US$9223 per tonne, the project returned a net present value of A$270 million and an internal rate of return of 55%.
Life-of-mine free cashflow was forecast at A$410 million.
At US$9900/t, the pre-tax NPV increases to A$357 million with an IRR of 74%, while free cashflow would be around A$520 million.
Copper is now trading at well over US$10,500/t.
Alliance advantages
Anax managing director Geoff Laing said the alliance would allow the company to consider production of at least 20,000tpa copper equivalent.
“The most obvious outcome of the alliance would be an entity that would hold a significantly larger resource base,” he said on a webinar on Monday.
He said incorporating Whundo ore would also lead to a longer period of production from open pits which would be “more favourable for funding and offtake”.
“There’s lot of pluses to this thing,” GreenTech managing director Tom Reddicliffe added.
While Whundo is much closer to the Radio Hill plant, there are no current refurbishment plans.
“The Anax opportunity is already happening – it’s being developed,” Reddicliffe said.
Base metals hub
As well as GreenTech, Anax is also in talks with free-carried partner Develop about processing oxide and transitional ore from Develop’s advanced Sulphur Springs copper-zinc project nearby.
Apart from Whundo and Sulphur Springs, there are at least eight other known base metal resources in the Pilbara.
“The Pilbara is better known for its iron ore and, more recently, gold and lithium,” Laing said.
Due to many of the deposits being high-grade but reasonably modest, the Pilbara was “ideally suited” as a production hub.
“It’s the most effective and efficient way of dealing with that material,” Laing said.
Funding talks underway
Laing was speaking from London where he was about to board a plane for Switzerland for talks with metal traders.
He reported an increasing level of interest as the copper price hit record highs.
“It certainly helps lubricate that funding process,” he said.
“We’re engaged with a number of parties at the moment.
“It’s safe to say the environment has improved significantly over the past couple of months. The benefits that can deliver on the funding side are not insignificant.”
